Complex Stakeholder Relationships - Essay Example

Critically analyze complex stakeholder relationships within the context of an international case study approach; London Olympic 2012 Contents Critically analyze complex stakeholder relationships within the context of an international case study approach 2 Evaluate and critically appraise issues within the context of international events management 5 Economic Impact 6 Social Impact 8 Environmental Impacts 9 Recommendation 10 Reference 12 Bibliography 13 Critically analyze complex stakeholder relationships within the context of an international case study approach The stakeholders are an important part for any business and especially for big events like Olympic events. London had won the bid to conduct the 2012 Olympics and it was a moment of joy for the country to host such a mega event. Early preparation for the games had taken place both by the project team and by the government but was sustained by the public and also by the cross party political party. Even after eighteen months there were hopes for the benefits of the event that it would bring to the city. However an important question arises whether all the aspiration of the games could be achieved. The budget which was previously assured to be sound but it is said that the cost incurred was estimated to be more than the prescribed budgets. The main three stakeholders of the London 2012 Olympics includes the BOA (British Olympic Association), Mayor of London and the Government. Other stakeholders are DCMS (The Department for Culture, Media and Sports), Olympic Park Legacy Company and Paralympics GB (London 2012 Olympic and Paralympics Games, n.d). Discussion with the stakeholders had revealed that there is a spatial variation between the stakeholders with respect to the plan and expectations of the Olympics. But all the stakeholders agreed to a point that the integration of the Park within the surrounding areas was crucial for the success of the Olympics. Some of the concerned which was raised by some of the stakeholders was with respect to the LMF process which should not be just about the Olympic Park but also on a wider LLV (Lower Lea Valley) area. The fringe was the priority which should surround the Olympic park but there were some concerns that fringe would be the second stage area which would generate a higher economic return (House of Commons, 2007, p. 5). The stakeholders also expressed mixed views on the opportunity that the game would provide for the East London and LLV. Some stakeholders said that Olympics can be used as a hook in order to raise aspiration which would in turn improve the quality of life of the people and the also increase the employment opportunities. But experiences from the previous cities which have hosted the Olympics however do not provide a strong support for the statement but the stakeholders believe that the event can potentially be used as one of the core mechanism for raising aspiration as well as mobilizing the communities. Some of the stakeholders though and viewed that a careful balance was essentially required between opportunities to maximize it and of expectation. Some of the stakeholders stressed the importance of engaging the private sector in Olympics legacies whereas other argued that the worst scenario of the private sector is that the public sector alone would decide upon the vision of the event but the stakeholders were of the view that the private sector would play a key role in the planning of the park and also of LLV (Keogh, 2009, p. 33). The events of the Olympics were to be held on different venues and one of the venues was Millennium Dome. It was rebranded to O2 Arena in 2007 is currently known as North Greenwich Arena 1. The O2 Arena has hosted gymnastics and basketball in 2012 Olympics. The Millennium Dome is a unique project which was conceived as Millennium Exhibition. The opening of the Dome was one of the major achievements of UK. The Dome had attracted lot of visitors and the project was funded mainly by three sources, from the visitors, national lottery and also from the commercial sponsors. The Millennium Dome was run by a private limited company, New Millennium Experience Company which was governed by the companies act and owned by the government. The company had faced financial difficulties during the year of its operation. The number of visitors has substantially decreased than the expected 12 million which was envisaged in the financial plan. Sponsorship had also fallen short of what was planned which was about 175million pound for about 14 zones. The company also predicted that it would be 5% over the suggested budget. Thus with regards to the difficulties the company has undergoes some serious changes at the senior level (National Audit Office, 2000). Due to the financial loss the Company’s chief executive and the Accounting Officer was replaced and a new finance director was appointed. After suffering from huge loss the company, Millennium Dome took the decision of solvency. The solvency of the Company has been a matter of great concern in the year 2000. It had appointed Price Waterhouse Coopers to report on the ground of solvency. In its report, the audit firm concluded that the company was insolvent. It was decided by the company that at the end of its operating year, the Millennium Dome would close off or sold off. The Dome project was one of the huge undertakings by the UK Government and also the process of decommissioning the Dome, it’s winding up and working to a position where it was able to go into voluntary liquidation. In the process of liquidation, the content of the Dome which also included the exhibition zone has to be removed and also a large number of contracts were closed. The Company also conducted forensic exercise to put focus on fraud allegations and this was done with the help of a team from Price water house Coopers (National Audit Office-a, 2002). Evaluate and critically appraise issues within the context of international events management Holding international events boosts up the economy of the country and helps in the revenue generation for the country. According to sport business the right to host any international events is one of the most valuable prizes in sports with a market value of about US $50 billion worldwide. The public sector’s motivation in order to host such events and in the process risk the taxpayer’s money is often based on the spillover effect which is associated with the game. Every country wants to host international events and some of the unprecedented response with respect to hold international events such as about 60 cities had made an initial approach to host the yachting’s 2007 Americas Cup; England had submitted its application to host ICC Cricket World Cup 2015; India, Bangladesh, Sri Lanka and Pakistan together submitted a joint bid for the ICC World Cup 2011; with respect to the Olympics 6 cities had submitted application I order to host the 1996 summer Olympics; Manchester had bid to host the 2000 Olympics games but due to expensive and too much of cost would be associated in urban renewal, however it got to host the common wealth game in 2002 which was one of the important reason in the decision of IOC to award London the 2012 Olympics. The mega event did have positive as well as negative impact on the city and the issues which were of concern were the economic, social, environmental and other effects such as security issues and others. The Olympics is also regarded as one of the mega events that is to take place in London and it did have positive as well as negative impact on the country’s economy, social life, environmental an other factors. Economic Impact Hosting the Olympics in 2012 has given rise to many tangible effects such as the overall level of the economic activity which is measured in terms of Gross Domestic Product; the level of investment which is made in infrastructure; the volume of investment and the pattern of tourism (Price Waterhouse Coopers, 2004, p. 18). The GDP of UK within the period of 2005 to 2016 is expected to increase by £1.9billion due to the Olympics. During the same period, the GDP of London is expected to grow by £5.9billion and the increase in GDP of East London is £0.5billion. A significant amount of London GDP is generated by the people who live outside the city but commute to London on work basis. Thus the earnings and spending of the people would largely benefit the economies of the part of the country. The overall impact of GDP tends to provide monetary measure of the potential benefit of hosting the Olympic 2012. It has been estimated that the largest economic impact in terms of GDP would occur during the pre games construction in London resulting in about £3.362billion and the impact on UK with respect to GDP would have be the greatest and amounted to about £1.067billion. Therefore the difference between the two estimated GDP proves that in the scenario with the Olympics taking place the resources would be displaced from parts of UK to London as compared to the scenario of London not hosting the Olympics 2012. It is been estimated that nearly about 84.4% chances are there that the Olympics would bring about a positive impact on the GDP of UK during the period 2005-2016. In London the estimation is much higher and it is estimated to be about 95.3% but at the same time, there are about 10% chances that the impact would bring about a loss to UK GDP by about £517million (Price Waterhouse Coopers-a, 2005). The Infrastructure is also expected to bring about an economic impact in UK. It has been said that UK as a country and London, 11% to 12% of GDP is attributed to expenditure on infrastructure. According to studies made for Olympics it has indicated that the inward investment is attracted in the preparation of the game which has also increased the global profile of London. London is a global city which has been regarded as prime destination with respect to inward investment in Europe and UK. London faces a tough competition from within and outside the emerging cities hence by raising the host city’s profile, i.e. London, through the Olympics internationally and makes London a business destination. The tourism of London is likely to receive a positive impact due to the Olympics. It offers the opportunity to attract more visitors in London and also other parts of UK. With the help of Olympics the country can promote London as a tourist destination and stimulate a sustained impact on the number of visitors and on their spending. The visitors estimated to spend during the event is often based on the allocation model of ticket in the London 2012 Olympics; the days that each visitor would spend is based on various number of sources; and the extent to which the event attract visitors is based on the assumption which is derived from an analysis of trends in arrival of the visitor pre and post events. Apart from the positive impact from the events, they are also considered to bring about certain negative impact. With respect to the residents of the city, the bad news is that the residents and the businesses have to incur the cost through higher taxes. Another reason as to why events might bring in negative impact is that a lot of major investments are spent on projects which tend to provide overall little long term value. In order to host an event, stadiums must be constructed and the infrastructure is unlikely to be utilized in the long run (Price Waterhouse Coopers-a, 2005). Social Impact The Olympics event has social impact on the host city. With the implementation of Olympics event the host city tends to generate employment for the people. The Olympic Park will provide the local people with significant improvements in fields of job opportunities, educations skill and training. Thus London is also expected to benefit from sporting and cultural legacy. The sporting legacy would enhance and also accelerate the investment in facilities provided due to sporting events not only within the Olympics zone but also in other parts of UK; it would contribute in the increased participation in sports which would lead to positive social and also physical impacts. The Olympic Park aims to provide the local people with some improvements in the cultural entitlements and social integration. The Olympics aims to strengthen the cultural activity and build the rich heritage of London and also provide new opportunities as well as facilities for the creative industry. Apart from the cultural and sporting legacy, the willingness to pay for the intangible benefits associated with the game is also of concern. The value of intangible benefits of hosting the game is estimated to be about £3.2billion with about 80% of the benefits incurring to the household sector residing outside London. The attitude of the residents of London seems to be positive with 79% of the population of London supporting for the bid and 81% of the population who are resides outside London. A majority of respondents believe that intangible benefits are important or at least equally important as tangible benefits. The negative effect on the social life is estimated that there would be a reduction of 30, 711 jobs in UK; redirecting the funding resources. There has been a risk that the sports sector tends to attract more funds than other sectors. According to a study published by DCMS intimates that are chances of displacement of resources from UK to London (Locum Consulting, 2006, p.47). Environmental Impacts The Olympics games are likely to have environmental impact in the city both in a positive and negative aspect. The Olympics are expected to generate environmental benefits in terms of land, water and air; biodiversity, energy, waste and other. The following table shows the expected impact on the environment across UK. Table 1 The main impacts are likely to arise from staging a sustainable game. This would in turn anticipate interest in applying approaches to event management. The impacts are likely to be strongest in the areas of land, water, air, waste, energy, housing which would last beyond the Olympics. But negative impact with respect to environmental factors is during the pre event and the construction phase. It has been expected that the construction would bring about a temporary deterioration of air quality because of the dust nuisance. Also due to movements of waste and materials an increase in road transport is expected hampering the normal life in UK. Recommendation The Olympics is likely to have both positive as well as negative impact on the host city. Thus it is important to emphasis more on the positive aspects and tries to eliminate the negative aspect. It is recommended to revisit the cities which have hosted the Olympics in the recent past and obtain economies of scale. Another recommendation is to reduce the size of Olympics only to the core events so that the benefits derived is worth the cost incurred. In terms of financial aspect it is recommended to address the weaknesses in the financial system and also procedure and improve the quality of information. It is also recommended to increase the sale of tickets which would account for a majority of actual total costs. The purpose of Human resource should be to support the business units of HR intervention which enables the organization in order to meet the business challenges and to ensure that the ODA fulfill the duties of public sector and employment. Thus it is recommended that full consideration should be given on how other strands are managed by the Human Resource department. Currently the HR and the people strategy are focused on meeting the requirements of E & I strategy. Reference House of Commons, 2007, London 2012 Olympic Games and Paralympic Games: funding and legacy. [Pdf]. Available at: http://www.publications.parliament.uk/pa/cm200607/cmselect/cmcumeds/69/69i.pdf. [Accessed March 15, 2012]. Keogh, L., 2009, London 2012 Olympic legacies: Conceptualizing legacy, the role of Communities and Local Government and the regeneration of East London. [Pdf]. Available at: http://www.communities.gov.uk/documents/regeneration/pdf/1345197.pdf. [Accessed March 9, 2012]. Locum Consulting, 2006, Review of the Impacts of the London 2012 Olympic and Paralympics Games on the South East Region. [Pdf]. Available at: http://www.seeda.org.uk/publications/strategy/docs/OlympicImpact.pdf. [Accessed 12 March 2012]. London 2012 Olympic and Paralympics Games, No Date, Stakeholders. [Online]. Available at: http://www.london2012.com/about-us/the-people-delivering-the-games/stakeholders/. [Accessed March 9, 2012]. National Audit Office, 2000, The Millennium Dome. [Pdf]. Available at: www.nao.org.uk/idoc.ashx?docId=1ff49e88-0716-406c-9c5d.... [Accessed March 15, 2012]. National Audit Office-a, 2002, Winding-up the New Millennium Experience Company Limited. [Pdf]. Available at: http://www.nao.org.uk/publications/0102/winding_up_the_new_millennium.aspx. [Accessed March 15, 2012]. Price Waterhouse Coopers, 2004, The economic impact of the Olympic Games. [Pdf]. Available at: http://www.pages.drexel.edu/~rosenl/sports%20Folder/Economic%20Impact%20of%20Olympics%20PWC.pdf. [Accessed March 15, 2012]. Price Waterhouse Coopers-a, 2005, Olympic Games Impact Study. [Pdf]. Available at: http://epress.lib.uts.edu.au/dspace/bitstream/handle/2100/443/OlympicGamesImpactStudy.pdf?sequence=1. [Accessed March 15, 2012]. Bibliography London 2012 Olympic and Paralympics Games, Infrastructure. [Online]. Available at: http://www.london2012.com/infrastructure. [Accessed March 15, 2012]. Olympic Delivery Authority, 2007, Olympic, Paralympics & legacy transformation Planning applications supplementary information. [Pdf]. Available at: http://www.london2012.com/documents/oda-planning/planning-applications/environmental-statement-non-technical-summary.pdf. [Accessed March 15, 2012]. Read More